First-differenced estimation in a panel data analysis is subject to serious biases if _____.

Select one:

a. the explanatory variables do not change by the same unit in each time period

b. one or more of the explanatory variables are measured incorrectly

c. the regression model exhibits homoscedasticity

d. key explanatory variables vary significantly over time

Suppose we are studying the effects of expanded income supplement for senior citizens on their health. We use the two-group, to-period differences-in-differences setup, with working-age citizens as our control group.Which of the following is a key assumption for the validity of this identification strategy?

a. After the intervention, the average health trends would be the same for both groups.

b. In the absence of the intervention, theaverage health outcomes would be the same for both groups.

c. Before the intervention, the average health outcomes were the same for both groups.

d. In the absence of the intervention, theaverage health trends would be the same for both groups.

How would an increase in a firm’s level of technology – for example, an increase in labor productivity – affect its cost curves (all else equal)? Would the range of production where the firm experiences economies of scale increase or decrease? Explain.

3. With the aid of a diagram, answer the following questions:

(i) What is meant by the term Efficient Frontier? (Assume no short sales and no riskless lending and borrowing allowed.)

(ii) ‘The mean-variance efficiency criterion can identify the optimal investment’. Do you agree this statement? Explain your answer.

Instruction:

What is Unemployment Rate and what are the factors that cause the UR to increase or decrease?

Do your own research. Write one page to define the Unemployment Rate and explain the factors affecting the UR. (Mention your reference at the end)

A monopolist faces three groups of customers (or three markets) such that:

Demand of the high-income group is given by P_h= 24 – 2Q_h  

Demand of the middle-income group is given by P_m= 20 – 2Q_m

Demand of the low-income group is given by P_l= 16 – 2Q_l

1. If the monopolist does not practice price discrimination (PD) and combines the three markets into one big market, then he charges a single price to everyone. If his marginal cost MC = $14, find the single price P_s, total quantity sold in the big market Q_t, and quantity sold to each group alone: Q_h, Q_m, & Q_l.
2. Find consumers’ surplus CS for each group or in each market.
3. Suppose the monopolist now decides to practice PD. His MC has not changed. Find the three prices charged: P_h, P_m, & P_l. Also find the three quantities: Q_h, Q_m, & Q_l.
4. Find CS for each group or in each market.
5. Give your own conclusion of whether PD was “good” or “bad” to each group. In your opinion as an economist, was PD “good” or “bad” in this specific scenario?  

Discuss the concept of product life cycle

Consider the two investments shown below, only one of which can be chosen. They are one-shot investments. Calculate AW_2-1 assuming 13.2305 interest rate.

Using the simplified one-period model explain in words and illustrate via a diagram how moving from a proportional tax to a lump sum tax would increase consumer welfare. Explain why the lump sum tax is more efficient.

Suppose the government needs to raise funds for its expenditures by a proportional income tax.
Explain in words why there could be two tax rates (i.e. two equilibria) that could raise the required funds for the government.

What can be said about harrod-domar model assertion based on savings rate? explain explicitly

Q5.      What distinguishes a firm’s short-run period from its long-run period?

Q7.      What is the difference between fixed cost and variable cost? Does each type of cost affect short-run marginal cost? If yes, explain how each affects marginal cost. If no, explain why each does or does not affect marginal cost.

Q8.      Explain why the marginal cost of production must increase if the marginal product of the variable resource is decreasing.

Q10.    Identify each of the curves in the following graph.

Q11.    Explain why the marginal cost curve must intersect the average total cost curve and the average variable cost curve at their minimum points. Why do the average total cost and average variable cost curves get closer to one another as output increase?

Q12.    In Exhibit 7 in this chapter, the output level where average total cost is at a minimum is greater than the output level where average variable cost is at a minimum. Why?         

Q14.    Explain the shape of the long-run average cost curve. What does “minimum efficient scale” mea

P19.     Complete the following table, where L is units of labor Q is units of output, and MP is the marginal product of labor.

1. At what level of labor input do the marginal returns to labor begin to diminish?
2. What is the average variable cost when Q = 24?
3. What is this firm’s fixed cost?
4. What is the wage rate per day?

P20.     Assume that labor and capital are the only inputs used by a firm. Capital is fixed at 5 units, which cost $100 each. Workers can be hired for $200 each. Complete the following table to show average variable cost (AVC), average total cost (ATC), and marginal cost (MC).

P21.     Suppose the firm has only three possible scales of production as shown below:

1. Which scale of production is most efficient when Q= 65?
2. Which scale of production is most efficient when Q =75?
3. Trace out the long-run average cost curve on the diagram.

Chapter Appendix  ‘Production and Cost in the Firm’ - Extra Credit

P1.       Suppose that a firm’s cost per unit of labor is $100 per day and its cost per unit of capital is $400 per day.

1. Draw the isocost line for a total cost per day of $2,000. Label the axis.
2. If the firm is producing efficiently, what is the marginal rate of technical substitution between labor and capital?
3. Demonstrate your answer to part (b) using isocost lines and isoquant curves.

how successful the two countries ( Netherlands and Malaysia ) used fiscal policy to pursue objectives of sound macroeconomic management post Global Financial Crisis until the end of 2018 ?

Prior to 2007 YouTube did not display advertisements and videos. Using the concepts of common resources or public goods (pick one), what problem did YouTube face as a service? How did the introduction of advertisements help solve this problem?